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A healthy deal

Rankin council approves payment deal with Sakku

Darrell Greer
Northern News Services

Rankin Inlet (Oct 10/01) - A deal worked out on an equity lease for Sakku Investments Corp. is a win-win situation, says Rankin Inlet's senior administrative officer Ron Roach.

The lease is for the lot where Rankin's new health facility is slated to be built on the road leading to Area 6.

The deal calls for Sakku to make an initial payment of $175,000 on Dec. 31, 2001 and another $175,000 on Dec. 31, 2002.

According to Roach, the lease agreement allows the hamlet to pay down its debenture while, at the same time, allowing work to proceed on the health facility.

"Sakku Investments came to council claiming its finances are extremely tight, and asked if council would accept two payments," said Roach last week.

"This arrangement will make it easier for Sakku to cash-flow the project, because it won't receive any money until the government actually opens the building. Considering it is a health-care facility, it's in the best interests of the community for the hamlet to do this."

The hamlet's bylaw on equity leases affords two choices. The lease can be paid up front, in cash, or 10 per cent can be paid up front and the balance, with interest, spread over the time of the lease.

Sakku has agreed to pay interest on the outstanding balance of its lease after the first payment on Dec. 31.

Roach said Sakku's two payments will allow the hamlet to make its own debenture payment during the next two years.

"We already have the money allocated to pay the debenture this year and, with the two payments from Sakku, we will have the money to make next year's payment as well," Roach said.

"Our debenture payments also come due on Dec. 31."

Roach said if Sakku defaults on its second payment, the hamlet will resume control of the lease, ensuring that it receives its money first once the health centre is open and the territorial government starts making cash instalments.

"Considering what the lease is to be used for, hamlet felt striking this deal was the best thing to do for the community," said Roach.

"We all know how badly that new health facility is needed and, hopefully, this will allow it be open for business that much sooner."